Alan Johnson: No, we are not, but the hon. Gentleman identifies a problem that was contained in the cancer strategy. There are variations around the country. I am sure that the hon. Gentleman will join me in congratulating his own PCT in Havering, where 79 per cent. of eligible women have been screened in the last five years. He is right about the disparities, which is why the cancer strategy asked all strategic health authorities to work with PCTs to identify how they can have more consistency and, in particular, how to get to those poorer communities. Even in the areas covered by institutions such as King's College hospital in London, which has a wide reach, there are still pockets of communities that those institutions are not getting to. That is a very important part of the cancer strategy.

Alan Duncan: The House has listened to the Secretary of State for well over half an hour, but I am not sure that we have learned very much. What we are debating today is less a Budget than a Government confession of all the accumulated consequences of their misbehaviour in the past.
	I call the Prime Minister's first Budget a "confession" because hidden away in the back of the Red Book is all the evidence of his wasted decade as Chancellor. We had 10 years of profligacy that are now costing families in higher bills every year: 10 years of incompetent management at the heart of Government that are now to cost business £1.7 billion extra over the next three years; and 10 years of the right hon. Gentleman bragging and boasting about how much he was spending, with no appreciation of the consequences.
	The Chancellor did his best to talk us into submission last week, but the rhetoric has unravelled and exposed us to some very uncomfortable home truths. For all that the Prime Minister used to bang on about prudence, the cruel truth is that prudence has turned out to be not such a pretty lass.
	The UK has the largest budget deficit in western Europe, and there has been a massive rise in Government borrowing. We have a consumer economy fuelled by unrestrained and certainly unprecedented levels of domestic debt, so it is no wonder that the Chancellor has been forced to downgrade his growth forecasts.
	But what is the Government's response? Is it to do nothing, and to be the very definition of soporific but sensible stability? If only it was: instead, the Government's instinct is to raise taxes and spend even more, and to hit the wealth creators and entrepreneurs who are the very people who can expand our economy and help wean us off our addiction to borrowing.
	In case Labour Members have forgotten, I can tell them that the wasted decade was built on the strongest economic foundations, and that it was sustained by 15 years of global growth. We have had high levels of liquidity in the market and low prices—until recently—of crude oil, with optimism remaining stable. We had all that, even despite the Asian crisis in the late 1990s, the bursting of the dotcom bubble or the tremors of 11 September.
	Ultimately, all economics is cyclical. Long periods of economic growth invariably end some time and a downturn follows. No matter how successful a country's, or company's, economic management may be, the good times always have a turning point. Nobody has yet managed to abolish the business cycle. It is the most enduring economic phenomenon. Its existence is the one thing for which we cannot blame the Government, but their refusal to admit that one day the cycle would turn is something for which they are utterly culpable.
	The surest sign that problems are looming and that the dreaded turning point is just around the corner is when bankers, institutions and countries convince themselves that they have entered a new period of history in which economic gravity can somehow be defied. As the Chancellor and the Prime Minister have both said to anyone who would listen, the disintegration of sub-prime debt did indeed light the fuse that led to the explosion of Northern Rock and the fireworks that we are witnessing in today's markets. Institutions are indeed partly to blame for allowing their judgment on the quality of lending to become polluted. For some, the music has stopped and market liquidity has evaporated.
	Much of this has indeed been caused by an irresponsible United States Government deficit, but the reason that the UK Government are now undeniably culpable is that they did not use that decade to prepare for the years that would inevitably follow. Especially with globalisation's pressure on competitiveness, the Prime Minister should have recalibrated the economy so as to reinforce it for more difficult times later. He did the opposite.
	At the end of the right hon. Gentleman's decade as Chancellor, we should have had lower taxes, less borrowing, better funded pensions and higher savings. Instead, all those variables have been moving in the wrong direction. Taxes are right up to their limits, debt—public and personal—is right up against the buffers, savings have evaporated and pensions have been raided to destruction by the Chancellor's unforgivable economic vandalism. He has squandered a decade of economic prosperity. He has disguised growing structural problems and deferred decisions that could easily have been taken when things were going well. He used the decade to support his political ambitions over and above the long-term interests of the country. Now, thanks to him, the economy has no slack to cope with a downturn. It is unduly reliant on the City, and housing transaction costs are likely to prove an exaggerated downward force on the housing market. He has not even managed the public finances sufficient to support inflation-based increases in public sector pay.
	The Prime Minister while Chancellor should have recalibrated the British economy not just to withstand the pressures of a cyclical downturn but also to equip it to contend with the new forces of global competition from the likes of India and China. While talking of doing so, in practice he did not. In other words, thanks to the Prime Minister, the condition of the economy is ill equipped to cope with the problems posed by events in world financial markets and it contains elements that are likely to exacerbate the problems.
	United Kingdom conditions are not prepared for the turn in the cycle. We have nothing set aside for a rainy day, so the pain people will face stands to be greater than it would otherwise have been. We can perhaps, therefore, rustle up a little dose of sympathy for the poor hapless creatures who have to follow in the wake of this bludgeoning Prime Minister. There is the poor, poor Chancellor who has had to succeed the Prime Minister's decade as Chancellor. He is like a poor malnourished orphan equipped with a bucket and shovel following a cart horse with bad digestion. Then we have the Secretary of State for the Department for Business, Enterprise and Regulatory Reform, whose words about our current Prime Minister were famously read into the record.

John Grogan: I first heard news of last week's Budget when I was in outer Mongolia, where I had been dispatched with the Foreign Office, well out of harm's way, along with my noble Friend Lord Malloch-Brown. Given that I am chairman of the all-party beer group, perhaps it was the best place for me, in view of the 4p rise in beer duty. In my brief remarks, I shall reflect on alcohol policy and the alcohol industry—an important industry in our country—the energy sector, the gambling industry, and non-domiciles.
	There was a significant change in the policy on alcohol duty last week. All alcohol duty—on wine, spirits, beer or cider—was increased by a similar percentage. A promise was made that in forthcoming years there would be increases of inflation plus 2 per cent. on all alcohol. It is worth exploring the reasons for that. Up to now, the Treasury has said that alcohol duty is a revenue raiser, rather than an aspect of health policy. Indeed, last week my right hon. Friend the Chancellor referred to increased alcohol duty giving additional support for families and lifting more children out of poverty. He also mentioned in his remarks, which were backed up by the Treasury press release, that as incomes have risen, alcohol has become increasingly more affordable. He spoke about ensuring that alcohol duties keep up with rising incomes. For the first time, there was a hint that alcohol duties were being raised for health as well as revenue reasons. I would be interested in any clarification from Ministers on that point.
	I want to explore whether the measures will be an effective way of raising revenue and promoting health. What are the implications for the pub industry, in particular? It employs 500,000 people and generates more than £20 billion—it is as big as the airline, retail clothing or media sectors. How much revenue are the increases likely to raise? The Treasury forecast in the Red Book suggests that £8.6 billion will be raised in the forthcoming year, up from £8 billion this year—a significant rise, particularly from wine duties, which will apparently raise more than £400 million extra. At the moment, our beer duty is the highest among those of comparable European Union countries, at nearly 40p a pint.
	In the past few years, beer duty has gone up a lot more than other alcohol duties: by 26.7 per cent. since 1997, compared with a 3 per cent. rise for spirits, an 11 per cent. rise for cider and a 16 per cent. rise for wine. However, as beer duty has increased, the tax take has not increased to any extent at all. In 2004, £3.1 billion was raised through beer duty; that has now decreased to £3.05 billion for the current financial year. The actual amounts raised through beer duty undershot Treasury estimates by £130 million last year and £160 million the year before.
	As beer duty has risen—considerably—since 1997, the gap between the price of beer in a pub and its price in supermarkets has widened. A pint of Carling in a managed pub cost £1.65 on average 10 years ago, but it is now £2.32. The average price of a pint of premium lager in a multiple grocer was £1.14 10 years ago but is now down to £1.05. There has been a shift.

John Grogan: The hon. Gentleman is ahead of me. Unless other measures are taken, the rises will reinforce the trend of the past 10 years of more off- sales and fewer on-sales. Ten years ago, the on-trade accounted for nearly 80 per cent. of beer sales; that has gone down considerably to just over 60 per cent. The measures will reinforce the trend from drinking in community pubs and towards more sales in supermarkets.
	I shall come to the impact on health, but I shall first address the impact on tax, as the hon. Gentleman mentioned that. It is important to remember that pubs and the beer industry pay not only excise duty, but VAT and employment taxes. In fact, Ernst and Young suggested that the entire pub and beer industry contributed a total of £9 billion to Government revenue. The more that is drunk in pubs, as opposed to at home, the greater the Government revenue. The Government receive £1.14 in taxes from a pint of beer in a pub, compared with 55p for every pint drunk in the off-trade. In themselves, the measures will, as the hon. Gentleman points out, damage drinking in community pubs and favour supermarkets.
	Tesco said something interesting a few weeks ago. For the first time, it admitted that it sells alcohol below cost. It hinted that that was a problem socially and suggested to the Government that it would be prepared no longer to sell it below cost if the Government changed the law to deal with the competition requirements that might be infringed if the supermarket moved alone. My fear is that, unless the Government move quickly to deal with supermarket prices, the impact of the excise duty changes will be, as the hon. Member for Banbury suggested, that the supermarkets continue to loss-lead, treat alcohol like baked beans and not raise prices in line with excise duty.
	Indeed, I have a letter from a major retailer and wholesaler to a brewer. It states:
	"As you know the aggressive market that we're all trading in continues".
	It suggests that the brewer does not raise the price of beer following excise duty and that:
	"Given the discount pricing strategies adopted in the past few years by the multiple grocers we are not confident that the budget will result in material increases in retail prices."
	The Government's review of the impact of alcohol pricing on health is due in a couple of months. The Government must act urgently and take Tesco at its word. I referred to Sir Terence Leahy before Christmas as the godfather of British binge drinking, and there is no greater joy in heaven than when a sinner repenteth. However, as St. Augustine said, "Lord, make me virtuous but not yet." That is Tesco's position and the Government need to encourage it to take the further step. I believe that that will require a change in the law.
	The all-party parliamentary beer group is now considering reference pricing— minimum pricing for alcohol—which is prevalent in Canada. In Canadian supermarkets, the minimum reference price of a bottle of beer is around 50p. We will hold a seminar, to which we hope to invite the supermarkets, the Treasury and the health lobby to ascertain whether we can reach a consensus. Without that, the increase in excise duty over the next few years will accelerate closures of village pubs—we have reached more than 20 a week on some counts. The community pub will also decline, and that is where drinking is supervised and managed, and where people generally drink socially. Such decline could have bad implications for one of the industries that make one proud to be British. I therefore hope that the Government will act on supermarket pricing and stand up to the supermarkets, given that they are going down a specific road on alcohol duty.

Alan Milburn: Of course it is right that we help business. The hon. Gentleman was talking about manufacturing in particular, and I have no problem with that. The best way to help manufacturing is not by artificially protecting it. We learnt a lot of lessons during the 1970s and 1980s, when Governments tended to develop a pretty poor record of picking winners, but people could be certain that losers developed a pretty consistent habit of picking Governments. We should bear that lesson in mind. Open markets and free trade are the best way of delivering results. Of course there are limits to the role of free markets and Governments have a responsibility to ensure that markets operate both efficiently and fairly, but equally, we must recognise that there is a limit to the role of Government and the centralised state.
	The second area about which I wish briefly to speak is the Government's role in tackling poverty and inequality. For me and, I suspect, for all Labour Members, it is a matter of great pride that a Labour Government have presided over the biggest falls in child and pensioner poverty that this country has ever seen, but we must also be candid about the fact that, despite rises in living standards and falls in poverty, a big inequality gap still scars our country. The ossification of British society— the slowing down of social mobility—that set in over many decades will clearly take more than one decade to unfreeze. Unfreezing it means recognising, as Amartya Sen, the Nobel prize winner for economics has rightly put it, that families and communities can suffer not only economic disadvantage but cultural, social, housing and educational disadvantage.
	The Budget's proposals to lift many more children out of poverty are welcome, but if we are not only to raise the glass ceiling but break through it, we must do more to empower individual citizens, especially the poorest, to exercise more choice and power in the way that better off people nowadays take for granted. Social mobility will not advance if we think that only wealth is unevenly distributed in our society. Power is also unevenly distributed. Equity demands empowerment. Never mind its succeeding economically, if Britain is to get moving again socially, people need more than just support from the tax and benefits system and they need more than just help getting a job, a house, training or child care. They need to enjoy far greater control and to have a bigger say in how they lead their lives. That is why I welcome what the Prime Minister calls
	"a new politics that places power...in the hands of people themselves."
	Although many of the Budget's measures are welcome, it could have done a lot more to make the notion of a state that empowers, not controls, the defining idea of the next phase of my party in government. For example, it could have allowed individual citizens, especially the poorest, to take control of their own budgets, not just in training, as the Red Book suggests, but in health, in old age and particularly in education. In those aspects of the public service where it is less easy for the individual to exercise direct control—most of us are hardly in a position to choose our own police officers, for example—the Budget could have set out how power could be relocated to local communities.
	I would have liked to have seen the Budget be far more ambitious in seeking to make Britain more of an asset-owning democracy. We know that asset owning works. Those with assets tend to spend less time unemployed, and they enjoy better health and greater independence in their lives. Indeed, evidence from the US suggests that home owners are far more likely to engage in local politics and local neighbourhood organisations. As Larry Summers once famously said, "No one ever washed a rental car." Why? Because ownership encourages people to act responsibly and independently.
	Spreading asset ownership is crucial to tackling inequality and speeding mobility. That is because the most substantial inequities in today's society are no longer between income groups but between those people who own shares or have a pension or own a home, and the people who rely purely on wages and benefits. That is why I welcome the Government's efforts to increase housing supply in general, and the Budget's proposals to make homes more affordable through new equity loan schemes in particular.
	Of course Britain needs more social housing, of that there is no doubt. But given a choice, most people would prefer to buy rather than to rent. The US sub-prime mortgage problem should not be allowed to derail the ambitious Government plans to extend home ownership to far more people. More than 1.5 million social tenants aspire to own their own home, and it is progress that 95,000 households have been helped into home ownership through shared equity schemes, but far more needs to be done. With fewer people able to afford to buy outright, and more young people dependent on their parents for financial help to get on the housing ladder, further reforms are clearly needed.

Edward Leigh: It is always a pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke), who always addresses the House in a measured way on behalf of the least advantaged in society. What he says is, of course, true: credit squeezes are not new. It is also true that lady luck has not smiled on this Chancellor since the previous incumbent moved next door. We all know that.
	The Chancellor has now presented himself as the steadfast helmsman steering us through the global economic storm, but I contend that in some key respects the Government's own navigation has contributed to the gathering gloom. To continue the nautical analogy, the squalls were apparent long before they hit us, as my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) said, and perhaps the Government were tardy in reefing their mainsail in time
	The Chancellor said that his Budget is responsible and that it matches increased spending with vital reforms. We all share that concern for reform and I welcome the examples of change that I have seen in my role as Chairman of the Public Accounts Committee. I always try to give credit where it is due. However, I have also witnessed too many examples of waste and inefficiency to share the Chancellor's supreme confidence in the certainty of savings that he promised us. I want to make that the gravamen of my contribution, which, I hope, will not be too long.
	Spending on health has doubled and there are many more doctors and nurses, as we were reminded, but hon. Members will perhaps not be surprised to learn that the statistics in the Budget speech do not reveal the full picture. There was no acknowledgement that productivity in the health service has fallen in recent years. Hon. Members might not trust me implicitly on statistics, but, on this occasion, they can also rely on the Office for National Statistics. Its latest completed figures show an average 2 per cent. decrease in NHS productivity between 2001 and 2005, which is worrying.
	Let me be clear: those who work in the NHS deserve to be paid a decent wage. We know that our lives and those of our constituents depend on them. They are not to blame for the inconsistency in outcomes. After all, the worst work on their behalf is often done with the best of intentions. For example, our Committee will shortly take evidence on the recent National Audit Office report on the new GP contract. There is the small matter that it cost £1.76 billion more than the Government expected, and that a 2.5 per cent. decrease in primary care productivity accompanied the first two years of the contract. Of course, the Government had predicated the entire reform on a productivity rise. The contract for NHS consultants was a similar story, and the predicted productivity rises have yet to happen. The cost of out-of-hours care was, again, higher than forecast, and delivery struggled to fulfil expectations. That is constantly repeated in public service delivery.

Edward Leigh: I agree and I want to suggest a modest reform in our procedures that might tackle the problem that my hon. Friend identifies. We have the best system in the world of post facto audit but one of the least effective Budget scrutiny systems. I shall deal with that in a little more detail before I sit down.
	I do not take issue with the rosy portrait of reform that the Budget statement presented for the sake of blind opposition. There is no point in that. We all believe in reform and I welcome, for example, the proposal that long-term recipients of incapacity benefit should attend assessments of their fitness to work. That is good, but hon. Members listening to the Chancellor would be forgiven for thinking that his £30 billion of savings a year are already in the bank. They are not. We have prepared numerous reports on the existing efficiency programme. The record on reform to date shows that savings are easy to predict but harder to achieve in practice. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), the shadow Chief Secretary, knows that well as he prepares for government.
	There are many wise men and women in the House today, but another, John Locke, wrote that
	"an unerring mark of the love of truth is not entertaining any proposition with greater assurance than the proofs it is built upon will warrant".
	To put it another way, experience tells us that the Budget is counting on chickens with a poor record of hatching. As a giver of candid advice, I therefore say to those on the Treasury Bench, as many of us have many times, that public faith in public services will not withstand public failures to deliver genuine reform, which is what we need and want.
	The price of failure to deliver productivity gains and efficiency savings will be paid in higher taxes and higher borrowing. That price is paid by us all, but, as I said in last year's debate, the burden is felt most by those who can least afford to bear it—the poorest and most vulnerable members of society.
	As hon. Members know, I believe that there is a strong moral case for lower taxation, especially for those least able to pay. Some hon. Members agree and others have yet to see the light. However, I believe that few hon. Members would dissent from the equally strong moral case for removing inefficiency and waste from public services. That is the case that we fought to further in our Committee.
	To give them credit, those on the Treasury Bench accept more than 90 per cent. of our recommendations, and hundreds of millions of pounds are consequently saved. That is an example of what parliamentarians can achieve when we work together, especially when we are supported by the National Audit Office. However, our scrutiny of public spending happens only after the event, to revert to the point that my hon. Friend the Member for Banbury made. We can encourage those who come next to imitate the good and avoid the bad, but we cannot head the problem off at the pass. That is true of many issues.
	Today, the non-doms issue was mentioned. Evidence on that is mixed. I have heard anecdotal evidence to suggest that many middle-income earners are leaving the country. I welcome the concessions in the Budget statement, but, in a sense, I disagree with my right hon. and learned Friend the Member for Rushcliffe, who speaks with all the authority of a former Chancellor, because I believe that pre-Budget scrutiny would help resolve such issues.
	We have debated the taxation of family cars. The public are only just waking up to the fact that their small family cars, not the large gas guzzlers, will be taxed. There was insufficient debate about the cost of the Iraq war and the Afghanistan operation. There is nothing more boring than listening to people saying, "I told you so", and my right hon. and learned Friend and I voted against the war. However, it has cost the Government £5 billion and it has cost the US Government $3 trillion. Another £2 billion is set aside for what will happen in Afghanistan and Iraq. All such issues need to be debated more often and in more detail in the House as the Budget goes through.
	Let us consider what happens in Congress in the US. I believe that opportunities to unleash the collective wisdom of the House are far too limited compared with what happens in Congress, where the President proposes, but Congress disposes. There are literally hundreds of hours of line-by-line debate on the Budget. What emerges from Congress is different from the President's proposals. Our powers in the House are far too limited. It is true that we have the Budget debate and three days of debate on the Supply estimates. However, the Budget confirms spending plans that are set out in the comprehensive spending review, of which there is almost no systematic scrutiny. The estimates are debated only after the beginning of the year in which the spending takes place. There is therefore little opportunity to influence the Government, even if they are listening.
	Hon. Members who serve on departmental Select Committees will also recognise the difficulties because they have so much more to do on policy issues. They have difficulty in consistently devoting sufficient time to spending proposals—indeed, they hardly consider them. Parliament was created hundreds of years ago primarily as a financial watchdog on the Government. It sat mainly during the whole Budget process. That power has atrophied and there is a huge scrutiny gap.
	Let me suggest a modest solution. I believe that the House should establish a Select Committee on the Budget, with the normal powers of Select Committees—I ask for no more—but with the specific purpose of considering the Government's spending plans. To allow the good sense and good faith of Members to have the greatest influence, hearings should be held well before plans take on the formal force of estimates. After all, voting against the supply of funds is tantamount to bringing down the Government. I do not suggest that; there is no nuclear option here. We need far less than that. My proposal would not shake the foundations of the constitution, nor would it significantly inconvenience the Executive. The Government would need to produce spending reviews by the summer recess—a feat achieved in 2002 and 2004, and missed last year only because of the then Prime Minister's extended goodbye. Annual updates would not be difficult to provide. The NAO would be willing—I know, because I have asked—to assist the House by analysing the information and providing a commentary for the Committee to consider at hearings each autumn.
	I hope that the Liaison Committee will shortly have the opportunity to consider my proposal. I hope that the Government's attitude will be welcoming. Two years ago, in the regular debate on the work of the Public Accounts Committee, which assimilates events that, sadly, too few hon. Members turn up for—I encourage them to do so—the then Financial Secretary to the Treasury, the hon. Member for Wentworth (John Healey), recognised that the scrutiny of public spending is fundamental to our democracy. He also said that
	"we need to introduce a more systematic and challenging parliamentary scrutiny of spending plans."— [ Official Report, 18 July 2006; Vol. 449, c. 289. ]
	I hope that the commitment given by the Treasury then to work with Parliament holds good today. Indeed, I know that it does, because the Treasury is doing a lot of useful work.
	Establishing a Budget Select Committee would reinforce the rights and privileges of this elected House. It would also reflect the truth in the words of Benjamin Disraeli, that
	"all power is a trust; that we are accountable for its exercise; that from the people, and for the people, all springs".
	Establishing such a Committee might even help the Chancellor in his quest for those savings from the public purse on which the success of the Budget so obviously depends.

Frank Dobson: No, let me go on.
	It is not only in the housing sphere that the financial services industry has developed a greater influence. For example, when people buy a washing machine or deal with a water company, it is a novel experience if their letterbox is not overwhelmed with brochures for insurance for their washing machine or insurance policies against the possibility of leaks developing. It gradually becomes clear to anyone with a grain of sense that these companies make more money out of the insurance than out of the washing machine, and that they make more money by insuring people against a risk that is unlikely to happen than by selling people water. Everything seems to be shifting towards financial services in that way.
	Then we come to the dreaded US sub-prime mortgages and collateralised debt obligations, which were offering something for nothing. I understand that the Financial Services Authority said recently that the public needed financial education. and that schools should be doing more to provide such education for young people. Above all, it said that we needed to get across the message that we cannot get something for nothing. Well, all I can say to the Financial Services Authority is, "Why don't you go and tell that to the bankers who got involved in the sub-prime mortgage scandal?" We have a worldwide system based on people trying to get something for nothing, promoting extravagant borrowing by hedge funds and private equity, and promoting a system of general speculation.
	One of the most hopeful developments recently was the news that the International Energy Agency is going to look into the effect that these borrowing-financed speculators have on the world price of oil. It is not old-fashioned, old-Labour me who is saying that the speculators have been driving up the price of oil; it is Governments around the world, the International Energy Agency and the United Nations. It would appear that the speculators, not content with their ruinous lending policies, are now driving up the price of fuel.

Tony Baldry: The hon. Gentleman makes a very good point, but there are a number of phrases that the Prime Minister was wont to use on many occasions—"boom and bust" is one that no longer appears from his lips, as even he can see the irony of it—that no longer apply. I am not quite sure what has happened to Prudence. I am very concerned about Prudence, but she seems to have been debauched. She has disappeared and we now hear nothing more about her. She has gone and the new girl on the block is Stability. That is what we are in love with nowadays and I suspect that the irony of praying to the mantra of "stability" will be so evident in a few months' time that even the Prime Minister will not allow the word to cross his lips.
	Economists have warned that voters face the equivalent of up to 3p more on income tax after the next general election. An analysis of last Wednesday's Budget by the Institute for Fiscal Studies showed that spending would have to be slashed by billions if the Chancellor does not want to break his economic rules. The IFS has said that it could mean Ministers having to plan tax increases to avoid cutting back on schools and hospitals if they should perchance win the next general election, which I think is increasingly unlikely.
	The IFS added to the gloom around the Budget in pointing out that middle-income households have been hammered by rises in tax for drinkers and family car owners. Robert Chote, director of the IFS, has said that details hidden in the Budget report reveal that the annual growth in spending will be cut to 1.8 per cent. in 2012-13, meaning a reduction in spending by around £8 billion by 2013—which would be equivalent to an income tax rise of 3p in the pound. That will be the result of the very substantial cut of £8 billion in public spending. No wonder that polls since the Budget reveal that fears about rising prices in food, fuel and taxes are people's biggest worries. Soaring gas and petrol prices, higher council tax and bigger supermarket bills were among the recurring themes of those who commented on  The Times online response to the Budget, to which 2,500 people contributed. People expressed concerns about the rise in energy and fuel costs, coupled with ever-increasing food prices.
	Not surprisingly, when YouGov did a survey, it found the following responses to various propositions: 86 per cent. of those surveyed agreed that their bills were rising faster than the Government said they were; 84 per cent. agreed that energy firms ripped them off and should have been hit with a windfall tax; 78 per cent. agreed that the Government wasted huge amounts of taxpayers' money—a point made very effectively by my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee and reflected in the concerns of many of our constituents; 66 per cent. agreed that the Government spent too much in the good times, so they were raising taxes now; and 74 per cent. agreed that green taxes were just an excuse to raise more money. It has not escaped the attention of most people that the Chancellor is not offsetting the green taxes raised in one place with taxes elsewhere; he is simply taking the green taxes as additional taxation.
	The main cause, I suspect, of the swing in the opinion polls to the Conservatives is the collapse of faith in the Prime Minister's and the Chancellor's stewardship of the economy. Just 21 per cent. of voters say that they would trust the Government more than the Opposition to raise their families' living standards; the Conservatives have a decisive lead on that issue. The overwhelming majority—83 per cent.—believe that the economy will either grow more slowly over the next 12 months or slide into recession. There is no question of people having to talk about this; the fact of the matter is that our constituents are genuinely concerned about what is happening to the UK economy. They find it rather depressing when all that the Prime Minister and the Chancellor can do is simply repeat the mantra of "stability" in the hope that if they say it often enough, it might actually happen.
	The Government's reputation for economic competence is now at its lowest since Jim Callaghan went cap in hand to the International Monetary Fund in 1976. At 28p in the pound, the UK has one of Europe's highest rates of corporation tax. This Government's spending binge has seen the size of the state balloon—from 37 per cent. to 45 per cent. of gross domestic product. Under this Government, the cack-handed expansion of means-testing has seen the savings ratio plummet from 11 to 3 per cent., with consumer debt now a staggering 156 per cent. of household income.
	The reality is that after the recent years of strong global growth, other countries such as Germany now have a budget surplus. Yet when it comes to fiscal management, the UK's so-called prudent Government have been outclassed by the allegedly profligate Italians and French, as Britain's budget deficit at 3.2 per cent. of GDP is by far the biggest of any major economy. That is why last week's Budget imposed a net tax rise of £2.5 billion—the precise opposite of what is now needed.
	It is important to understand the extent of the Government's borrowing. This time last year, when the Prime Minister delivered his final Budget as Chancellor, he said that the Government would borrow £30 billion during 2008-09—the fiscal year about to begin. Yet in his first pre-Budget report, the present Chancellor raised that estimate to £36 billion—an alarming increase. Last Wednesday, the Chancellor jacked that amount up even more, announcing that borrowing in 2008-09 would, in fact, be £43 billion. In other words, in just 12 months, the Government's borrowing estimate for next year has increased by no less than £13 billion, a jaw-dropping 43 per cent. rise.
	Looking further into the future, the numbers barely improve. The Prime Minister told us last year that he would borrow £28 billion in 2009-10. The Chancellor has just raised that figure to £38 billion. During 2010-11, the UK will increase its liabilities by another £32 billion—way higher than the Prime Minister's £26 billion estimate last year. In sum, our borrowing totals for 2008-09 to 2011-12 have gone up by £20 billion since the Chancellor's pre-Budget report. That is a staggering sum of money, which has not hitherto been accounted for.

Tony Baldry: I am sure that the supporters of this Government will pay an electoral price in Scotland, as they will everywhere else in the United Kingdom, because every part of the United Kingdom has been hit by their inability properly to manage the economy.
	In the quiet watches of the night, even Ministers realise how bad is the present state of the economy. If we look at the detail of the Red Book, we see that the Treasury expects house prices to fall in real terms in the coming year, causing the first fall in stamp duty revenues since 2001. It is stated that due to
	"sluggish or flat house price growth, receipts related to property such as stamp duty land tax, inheritance tax and capital gains tax, are expected to be £2.25 billion lower in 2008/09 than in the Pre-Budget Report."
	The Treasury also expects to generate less from the City and business as the credit crunch and impending economic slowdown hit enterprise. What does the Chancellor do in response? He increases taxes and puts up the Government's borrowing to the highest rates for more than a decade.
	As a consequence of the Budget, middle-income groups will be hit by a national insurance stealth tax. In every Budget that this Government introduce, various things are not apparent on the day. However long and soporifically the Chancellor drones on for, we often discover a lot of the nasties either in press releases issued by the Treasury afterwards or in the small print. This year was no exception. The Chancellor made no mention during the statement of the rise in the earnings ceiling for national insurance by £100 to £770 a week, but it was in the details of the Red Book. Analysts suggest that from 6 April next year, the 11 per cent. band will apply to earnings up to £40,040. Anyone on £41,000 or more will therefore pay about £500 a year more. That change will bring the Treasury additional revenue of almost £2 billion a year.
	Instead of helping people out in the Budget, the Government have hit them again with big increases in alcohol prices, big increases in the purchase price of many family cars and big increases in taxes on business hidden in the small print of the Budget. Our constituents have to pay more for their drink and their cars. People are being kicked while they are down.
	According to number crunching by the ever-vigilant Taxpayers' Alliance, nearly nine in 10 cars will attract higher rates of tax under the Chancellor's proposals. Less than one in 10 vehicles will benefit from the new system, and the biggest losers will be family cars. As a result of the reforms in the Budget, however, it is stated that
	"the majority of motorists will be better or no worse off in 2009."
	It is unbelievably difficult to relate that assertion to the fact that nearly nine in 10 cars will attract higher rates of duty. The vehicles hit will include modest family cars and people carriers, so that drivers of Skodas, Ford Mondeos and other models costing up to £20,000 will be hit almost as hard as those paying 20 times as much for their Rolls- Royces, Bentleys and Ferraris. Mondeo man, whom the Government courted to get into power more than a decade ago, is paying the price of filling the Government's borrowing black hole.
	The Prime Minister's much-trumpeted green effort seems to have a very ad hoc quality. With regard to carbon emissions, the Government seem to be focused more on the targets that are the most visible than on those that are most at fault on carbon emissions. There is also a certain degree of gimmickry—for example, the non-tax on plastic bags. The Chancellor announced the possibility that next year he would propose a law to require retailers to charge for plastic bags and transfer the profits to charities. That is rabbit-out-of-the-hat stuff to distract people from what is happening to the economy.
	It is not surprising that Tony Juniper, the executive director of Friends of the Earth, commenting on the Budget, said that it
	"falls a long way short of not only what is necessary, but also what was possible to do...we need far more substantial measures to encourage waste minimisation and recycling.
	Green tax measures would be more popular if they were linked to cuts in taxes on people and jobs...
	Given New Labour's reputation for slick communications it seems that it was not a lack of creativity that was at fault, but a lack of leadership, vision and imagination."
	The whole Budget demonstrates lack of leadership, vision and imagination.
	The Budget is bad for small businesses. The Government deployed one of the oldest rhetorical approaches: when in trouble, they simply talked a good game and pretended that everything would be fine. On the day of the Budget, a new enterprise strategy was launched, regulatory reform was promised, and the Chancellor pledged to do more to help small firms get access to the finance that they needed. Business will not be deceived. The Chancellor is imposing more than £1 billion in new taxes on small firms at just the wrong moment in the economic cycle. He appears oblivious to that. He delayed a further £200 million tax rise on family businesses only because he realised at the last moment that it would not work. Those entrepreneurs and people in small business have already been hit by the scrapping of the 10 per cent. capital gains tax rate, and the Government will now reward only the first £1 million of wealth created—anything above that will be taxed at 18 per cent.

Tony Baldry: The treatment of capital gains tax has been and continues to be a fiasco. Clearly, the Government have arrived at a compromise between wanting to get the greatest possible tax take and not wishing to frighten off the business community too much. The Government have recognised that the business community have understandably fallen out of love with them, and are trying to mitigate the damage.
	Business owners have also been hit by reforms to capital allowances, which will raise billions for the Treasury. That makes the giveaways in the Budget—a small £30 million enterprise capital fund, a £12.5 million fund to invest in female-run businesses, and a £60 million increase in the small firms loan guarantee—appear to be exactly what they are: token gestures.
	While it is true that businesses will receive more than £680 million worth of tax relief from the Chancellor over the next three years, it is also true that £1.4 billion worth of new taxes will eat away at any gains that they may make. For most businesses, the rate of capital gains tax will rise from 10 per cent. to 18 per cent., a rate that the Chancellor said would be introduced next month as planned. Britain's corporation tax income from companies is higher than that of any other countries except Japan and Canada. Bill Dodwell, a tax partner at Deloitte, has said:
	"Businesses are worried at the rate at which things are taxed but also on what they are taxed. They are taxed on far more... than in other countries".
	Businesses have been hard hit by this Budget. Let me take up what the hon. Member for Selby (Mr. Grogan) said about the tax on beer. As James Clarke, managing director of Hook Norton brewery in my constituency, has observed,
	"A duty increase would not significantly affect off-trade prices, but would be devastating for pubs... Beer sold in pubs contributes to local economies, and often the pub can be the only retail outlet in a community, but obviously this still needs to be a viable business. Pubs are under increasing pressure from energy and food prices, as indeed we all are, so freezing duty on beer would not only be a real benefit, but it would also be seen as such."
	Of course, the Government did not freeze the duty on beer; they put it up.
	In my constituency, businesses will be asking "What next? We are seeing post offices being closed, hospital services being downgraded and village pubs disappearing. What will we see next under this Government?" I do not have time, notwithstanding the generous allocation that the House has given me—

Michael Meacher: I do not propose to comment on what was said by the hon. Member for Banbury (Tony Baldry), because he repeated large amounts of what we have already read in the newspapers. What I will comment on, before I come to my main point, is the principal line that the Opposition appear to be taking in the debate. It was taken by the hon. Member for Rutland and Melton (Alan Duncan), by the right hon. and learned Member for Rushcliffe (Mr. Clarke), the former Chancellor, and by the hon. Member for Gainsborough (Mr. Leigh), the Chair of the Public Accounts Committee. Their argument was that the Government were at fault because they could have prepared earlier and better for the downturn. My argument is that this is not a normal downturn in a regular business cycle, and it is disingenuous and simpliste to suggest that that is so when the two central factors in the crisis are the United States sub-prime fiasco, for which the United Kingdom Government are not responsible, and—linked to that—the massive shift to securitisation and the opaqueness of trade assets. Because of the complete failure in the role of the credit rating agencies, the toxic effect of that was discovered too late.
	I am not saying that the Government are not responsible in some ways. The Financial Services Authority could have acted more quickly in respect of Northern Rock, and there are other aspects of the crisis in the United Kingdom that we need to examine, but I believe that the main responsibility lies elsewhere. It is very easy in opposition, and in retrospect, to blame the Government irrespective of any real analysis of the situation.

Michael Meacher: I recognise that there were issues of long-term sustainability, some of which the hon. Gentleman has mentioned. In fact his intervention has helped me, because my main argument will pick up some of what he has said.
	There was one rather odd omission from the Budget. It contained next to nothing about dealing with tax avoidance. That is quite surprising given the difficult state of the public finances—to which the hon. Gentleman rightly drew attention—the Chancellor's obvious need to close the gap, and the current international campaign led by Germany to tackle the scandal head-on, which I consider very important.
	As we know, the hole in public revenues amounts to some £40 billion. That is a large amount, and it is increasing. The Treasury forecasts that the figure will be £7 billion higher than was suggested in the October pre-Budget report. The Chancellor had every incentive to claw back tax avoided and evaded to help balance the books without raising taxes for the rest of the population.
	A recent pamphlet produced by the Trades Union Congress and written by the tax accountancy expert Richard Murphy found that tax avoidance and tax planning—by which I mean fabricating plans artificially in order to pay little or no tax, a device employed by very rich individuals—now account for about £13 billion a year, while the same device employed by companies in rather different ways accounts for a further £12 billion a year. There is obviously plenty of scope for much tougher anti-avoidance measures that would benefit everyone else. If such persons can be made to pay their due and proper taxes, others will need to pay less. Moreover, Inland Revenue statistics show that those who are paid more than £100,000 a year, who constitute less than 1 per cent. of the population, now receive £8 billion in tax reliefs and allowances.
	Another important factor that could well have propelled the Chancellor towards a Budget assault on tax avoidance, which I think is long overdue, is that the international atmosphere is much more conducive to tougher action that it has been for decades. Germany, as we have read, believes that it is losing nearly £25 billion a year in tax evasion by rich Germans holding anonymous trusts in Monaco and Andorra, in addition to others who, rather curiously, were outed by a whistleblower as having secreted huge sums of money in another tax haven, namely Liechtenstein. Germany is now demanding cross-national action to force countries with banking secrecy to share information. That is a favourable climate for the UK to participate and take the lead.
	Since there is considerable evidence that super-rich British people also use these and other tax havens—notably the Cayman Islands—for the same purpose, a crackdown on those avoiding their tax responsibilities could produce big benefits for the UK Treasury and, my goodness, there has never been a time when the UK Treasury needed big benefits as it does now.
	Why was that not done in the Budget? I suspect the reason is the stranglehold exerted by the City on the Government—particularly on the Prime Minister, I have to say—who have been persuaded that the financial enclave of the City of London is central to the economic interests of the UK as a whole. I submit that of course it has an important role, which I would not downplay for a moment, but the idea that it is central to the UK economy is quite another proposition.
	By bending over backwards to encourage hedge funds and private equity firms through the most egregious tax liberality—I refer to the absurdly low 18 per cent. basic tax rate on income from the carry, or share, of the gains on these massive deals, which is less than half the income tax rate payable by top earners—and as a result of other measures, the Government have in effect turned the UK, or more specifically the City of London, into a gigantic tax haven for the internationally mobile business élite. The problem is that, by sucking talent and capital from other parts of the economy, the remarkable successes over the past 10 years, which I am the first to praise, have been bought at a very high price—I would say too high a price.
	As the credit crunch is now exposing, City profits on invisibles cannot and never could compensate for the steady, continuing decline of Britain as a manufacturing nation—and that is the basis of wealth for all industrial countries. The volatility and excesses of the finance sector are outweighed by the 1 million jobs lost in manufacturing over the past decade, the stagnant industrial output, the £7 billion-a-month trade deficit, and the weakness of manufacturing investment and of the so-called knowledge economy—R and D—which is confined to a very few sectors. Those also have to be taken into account. My point is not that the City of London does not have a key role, but that it cannot be allowed to exploit that role at the expense of reducing the capability of Britain as a sustainable industrial base.
	Even when other countries have recently made what can only be regarded as a very serious effort to counteract some of these excesses in tax avoidance, the UK has taken a lead in blocking them. The UK has for example regularly refused to allow the deduction of tax from interest payments within the EU, which would hugely restrict the effectiveness of tax havens because the basic rate of tax—presumably about 20 per cent.—would already have been deducted from the income before it reached the tax haven. There can be little doubt that this withholding tax proposal of the EU was stymied in order to preserve the UK as a tax haven, given the City of London links to the overseas protectorates and Crown dependencies.
	If I may I shall give just one more example of what I think is an industrial and financial way of life that is not sustainable. Maintaining fiscal independence from Europe may be a populist move—clearly it is in this country—but in reality it enables the international corporations to play the EU and other countries off against each other in constantly bargaining for lower tax rates.
	The credit crunch and the approaching downturn, which some people, even today, believe may have very serious consequences, show that a different approach is now necessary. Not only is closer regulation of the financial markets clearly now imperative to prevent future damage to the international economy—the precipitate collapse of Bear Stearns is clearly not the last of it—but the UK in particular can no longer afford either the prohibitive cost of the tax privileges of the City or, just as importantly, the collateral manufacturing damage inflicted on Britain as an industrial nation.  [ Interruption. ] Before the hon. Member for Runnymede and Weybridge (Mr. Hammond) gets carried away, let me remind him that Winston Churchill, as Chancellor in 1925, said that he would rather see industry with head held high and finance less proud. He was absolutely right, and that applies just as much now.
	In particular we need a fundamental change in the tax culture in this country so that corporations and super-rich individuals no longer regard it as a duty—as we learned from Tesco in the press a few weeks ago—to minimise tax by any artificial devices that can be dreamed up to secure private gain. It is surely, by contrast, a responsibility that they make a fair contribution to the overall public gain of which they are a part.
	There are several ways to achieve that. Obviously a key one is to seek to eliminate tax haven abuse. The non-governmental organisation Tax Justice Network calculates that the total assets now held by the wealthiest people in the world in tax havens amounts to a staggering $11.5 trillion, at a potential cost to world Governments in tax forgone of about $255 billion. To put that in context, the money lost to Governments worldwide is more than two and a half times total global aid flows last year.

Bernard Jenkin: It is not an unalloyed pleasure to follow the right hon. Member for Oldham, West and Royton (Mr. Meacher), although it does present me with an opportunity to thank him for sponsoring my private Member's Bill to deal with the problem of fly-tipping, which was introduced under the 10-minute rule. I fear that his speech was a return to the fantasy land of 1970s extreme socialism, when Anthony Wedgwood Benn used to say, "The Government should grab the pension funds from the City and invest them in industry," as if those vast pension funds were somehow the plaything of the rich.
	The right hon. Gentleman truly misunderstands the mobility of modern capital and of individuals in the global economy. He talks about billions of pounds being raised by dealing with tax avoidance, but those billions of pounds will simply disappear from the UK's jurisdiction. I do not apologise for one moment for the fact that we have made London and the United Kingdom a tax haven for a great many rich people, who come here and pay modest taxes in this country instead of higher taxes elsewhere. Hundreds—if not thousands, or tens of thousands—of individuals bring their talent and wealth to London and this country not just because it is a great country to live in, but because it is worth their while financially to do so. We will be casting them out.
	It must be placed on the record that the mooted alterations to the status of the so-called non-doms have already done great damage to the UK's reputation for stable tax policy. Stable tax policy—predictability in terms of the tax burden—is vital for business men to be able to plan and invest for the long term. If the right hon. Gentleman's proposed amendment were to pass, he would effectively be creating probably the most unstable tax regime in the whole of the OECD, which would be guaranteed to drive a lot of inward investment and talent away from the UK, at great cost to the Exchequer. We should have learned over the past 10, 15 or 20 years that lower tax rates in fact yield higher tax revenues, and a benign tax regime is good for economic growth, for tax revenues and for the very public services that he and I both believe in.

Bernard Jenkin: I would like to pick up on a point made about the abolition of the 10 per cent rate. Only last week, my surgery received a visit from a pensioner couple who could not understand how they have been caught by a grievously punishing tax increase. The lady is a non-taxpayer on a modest pension; the gentleman did pay 10 per cent. tax but will now pay 20 per cent. tax, and there is nothing that they can do about it. It is monstrous for this Government to claim that they are eradicating poverty when they treat categories of pensioner in that way. I hope that the Chief Secretary to the Treasury will take heed of the point that the hon. Member for Taunton (Mr. Browne) and I have made in this debate and respond to it, because I cannot for the life of me see how that policy can be greeted as fair.
	The main burden of my comments centres on whether the Government are properly prepared for the economic downturn. I listened to the comments made by the right hon. Member for Oldham, West and Royton, and I should like to make a correction: no one is blaming this Government for the sub-prime crisis in the United States—I am happy to put that on the record and I am sure that my Conservative colleagues would assent to that. We cannot pin that one on the Government. What we can point out, however, is that over the years people have warned about a forthcoming credit crunch. For example, in evidence to the House of Lords Select Committee on Economic Affairs on 7 November 2006, Professor Tim Congdon said that
	"the current high rate of money growth is largely responsible for the buoyancy of asset prices and mini-boom conditions in the UK's service industries...asset price weakness, including falls in house prices, is a probable feature of the adjustment to slower money and demand growth in late 2007 and 2008."
	He did not foresee a credit crisis, but he certainly foresaw a correction that would be reflected in falling asset prices or lower growth in those prices.
	An even earlier piece of evidence, published in 2005, was a book entitled "Crunch Time for Credit?", by Edward Chancellor, the financial historian. That book noted:
	"The credit bubble that has developed in the UK and US economies over recent years is unsustainable and has 'badly corrupted' the economies of the two countries, with potentially serious destabilising results, says a major new study of the economic and investment implications of the build-up of debt in the two countries."
	The book refers to the great depression of the 1930s and the recent experience in Japan and Korea as examples of what could be happening in the United States and the United Kingdom. He wrote:
	"The growth of credit has created an illusory prosperity".
	The Government have to take their responsibility for that. He continued:
	"It may well end in either an extraordinary deflation...or an extraordinary inflation."
	When discussing the UK economy in particular, he said:
	"The UK economy has become 'increasingly vulnerable' to a credit crunch".
	So this particular crisis did not come out of the blue as a bit of bad weather. Anybody who knows anything about economics knows that straight lines do not continue for ever.
	The hon. Member for Dundee, East (Stewart Hosie), who was briefly in his place on behalf of the Scottish nationalists, discussed the words used in the voluminous book that we still call the Red Book although it has been disguised as a sort of pamphlet that puts the argument for all the Government's polices. It contains pictures of schoolchildren, a dear old lady, somebody building a house, somebody recycling their rubbish and somebody carrying a bicycle, but it is meant to be a serious document. Budgets have become increasingly unintelligible; they talk about, "Sustainable growth and prosperity" but it is difficult to find a Government table illustrating debt, borrowing and spending, given the chapter heading:
	"Fairness and opportunity for all"
	I wish we would get back to more intelligible Budget documentation. Nowhere does the book refer to the end of boom and bust, which is what we were promised. No matter how many times the Prime Minister promised an end to boom and bust when he was Chancellor of the Exchequer, any sensible person knew that no Government could promise that. Thus, in the good times one is meant to prepare for the bad times. One thought that that was what the golden rule was all about—it was meant to be about building up the capital in the good times so that we could weather the bad times, but that did not happen.
	What has happened over the past 10 years is that the Government have substantially increased public expenditure. It has risen from 37 to 42 per cent. of gross domestic product, which is a 40 per cent. real terms increase over seven years and has the effect of overcalculating GDP. A useful table produced by Reform shows that GDP is inflated by about 7 per cent. merely by increasing public expenditure.
	As the right hon. Member for Holborn and St. Pancras (Frank Dobson) said, nurses and doctors create wealth too. If more money is spent on nurses, doctors and teachers, that contributes to the GDP. Unfortunately, the large increases given to health and education over the years have not produced the commensurate increase in output and productivity—in fact, productivity in the health service has collapsed. That is one of the reasons why some of us prefer the private sector over the public sector when it comes to deciding how to modernise public services. Interestingly, even this Government are importing all kinds — [Interruption.] The Chief Secretary is looking suspicious, but she might ask herself why treatment centres are to be run by private companies. She supports bringing the private sector into the health service, and that is one of the policies that we will need to examine.

Peter Bottomley: My hon. Friend is referring to the growth of public spending. I hope that he will remind the House that we must wait until the last two pages of the Red Book—pages 203 and 204—before we discover table C14, on the historical series of public sector balances, receipts and debt, and table C15, on the historical series of government expenditure. It is all laid out, but, surprisingly, Ministers did not include it earlier in the book.

Mark Prisk: It is a pleasure to follow the hon. Member for Blaydon (Mr. Anderson), who spoke powerfully and sincerely about the matters that concern people in his constituency. I hope that the Minister was listening. I suspect that politically, there are things that will divide us, but the hon. Gentleman made a very powerful point about aspiration. That is a subject that has not been mentioned much in the debate, although I hope to talk about it in a moment.
	I was also interested to note that the hon. Member for Blaydon was the fourth Labour Member to speak negatively about the effect of the proposed beer tax changes on small businesses, pubs, clubs and local community groups. Again, I hope that the Minister was listening carefully.
	Last Wednesday, the attention of British business and economic commentators was focused on what might be in the Chancellor's Budget statement to the House, but in the long term, it would probably have been better if it had been focused on events in New York. While we focused on the contents of the Red Book, the fate of Bear Stearns—Wall street's fifth largest investment bank—was beginning to unravel. This debate has been going on since last Wednesday, and in that time Bear Stearns has been sold off, for a price that represents just 6 per cent. of what its value was last week. Last week most of us may not have been intimately familiar with Bear Stearns, but its fate has repercussions for us all. Many hon. Members have mentioned the credit crunch, but the fate of Bear Stearns shows that, far from being over, the crunch has merely embarked on its next phase.
	Sadly, as various hon. Members have noted, this country is not well placed to cope with the coming financial storm. Indeed, we are more vulnerable than many of our competitors. Higher personal debt, low private savings and a record balance of payments deficit have left this country exposed, because we rely so much on other people's money.
	However, the debate has made it clear that it is the level of Government borrowing that is exposing us to the worst of the bad economic weather. We have had 15 years of steady global growth. Over that period, any sensible Government—like any sensible business—would have taken the opportunity to build up their position and put something in reserve. Not this Government, though: instead of entering the downturn with a healthy surplus, they have built up a huge deficit. At 3 per cent. of GDP, our budget deficit is worse than that of all our major competitors—unless, of course, the Government now wish to count the Egyptian economy as a major competitor.
	What a wasted opportunity it has been! Having inherited a golden legacy, Labour could have—should have—used the past decade to invest for the long term and prepare for the downturn. What have we had instead? The Government have not taken the long, strategic view; rather, we have had a decade of petty tinkering and meddling, of petty targets and stealth taxes. I suppose it was no surprise that last Wednesday, with the global financial markets in turmoil, the Chancellor dithered over whether we should have a ban on plastic carrier bags. That was the extent of the vision in the Budget.
	One result of the Government's obsession with fiscal tinkering is that this country now has the longest and most complex tax code of any major economy. Since 1997 "Tolley's Tax Guide"—the principal compendium of all our tax regulations—has doubled in size and is now nearly 10,000 pages long. Ministers claim that they want to simplify the tax system, but their policies are achieving the reverse.
	The Red Book—I shall carry on calling it that, although my hon. Friend the Member for North Essex (Mr. Jenkin) was right to say that both its colour and its purpose have changed—contains all the principal measures in the Budget. Two pages are devoted to tax simplification, but they are accompanied by tax law explanatory notes 270 pages long. Indeed, the explanatory notes on all the changes are longer than the entire Red Book itself. By tinkering and meddling with dozens of taxes, rates and thresholds the Chancellor—and inevitably, of course, the Prime Minister before him—has created a hideously complex system that wastes the time and money of every taxpayer and business in the land.
	That leads me to the Government's peculiar approach to so-called tax abuse. I am sorry that the right hon. Member for Oldham, West and Royton (Mr. Meacher) is not in the Chamber at present, as he gave us a fascinating description of how he thinks we should clamp down on anyone who is successful. Hon. Members will know that until 1997 there was tax avoidance and there was tax evasion; one was legal, the other was not. The Prime Minister, when he was Chancellor, rejected that approach. He believed that too many people were abusing the system and not paying what he thought that they should. He therefore devised the new notion of tax abuse, which sits somewhere between evasion and avoidance and, peculiarly, straddles both legal and illegal activity.
	For example, the IR35 rules were brought in to tackle freelancers who the Prime Minister, when he was Chancellor, thought were abusing the system. We were told that millions of pounds of taxpayers' money would be recovered, but the reality is very different. For example, of the 1,400 cases taken out against freelance members of the Professional Contractors Group—a body that represents just one part of the marketplace—only three have been prosecuted successfully by the taxman.
	The same misguided thinking can be seen in the so-called "income shifting" proposals. Over the last few years, Her Majesty's Revenue and Customs—sanctioned by Ministers—has spent nearly £500,000 on a single vindictive case against Mr. & Mrs. Jones of the Arctic Corporation, over an alleged liability of only £40,000. There was a good use of public money: spending £500,000 on a case to reclaim a £40,000 alleged irregularity! Ministers lost the case, both on appeal and in the High Court, so what did they do? They decided to change the law, with the result that they now seek to interfere in every family business and to decide the value of what different owners bring to that business.

Stewart Hosie: Before the hon. Gentleman moves from manufacturing to child poverty, may I say that I welcome what he said about north-east Wales and I am delighted for his constituents working in those industries, but he should not be complacent about the 650 employees at NCR who were laid off last year or the 100 at Michelin in my constituency, the closure of the Yorkshire Fittings plant in my constituency, the wheelchair company that moved production to China, and Patak's Foods. There is not a universal picture. A million manufacturing jobs have been lost; 1,100 across Dundee in the past year. The hon. Gentleman must realise that the picture that he paints is not uniform across the UK.

Paul Flynn: It is a pleasure to follow the hon. Member for Ludlow (Mr. Dunne), which is part of Wales's Sudetenland, as he knows, not that we have any plans to re-conquer it. I am sorry that I did not hear an expression of the spirit of generosity that we have seen from the English rugby XV, following recent events on the other side. We have heard what seems to be a Meldrew approach to the Budget. I was also delighted recently to see something that I had not noticed before—that the English rugby team has "O" and "2" on its kit. Apparently, that is the answer to the question of how many times certain countries have won the triple crown in the past five years: two times for Wales and zero, sadly, for England. However, it is nice of England to do that for us.
	The hon. Member for Hertford and Stortford (Mr. Prisk), who has just left the Chamber, made some selective points about entrepreneurship. It is only fair that I should cite some facts about entrepreneurship that he unfortunately omitted. The UK is now third in the G8 ranking for early stage entrepreneurship, which is very creditable, up from fifth in 2001. That is a considerable improvement. The proportion of the working age population expecting to start a business in the next three years has increased by 70 per cent. Again, that is very creditable and a good story. The proportion of the population who believe that they have the skills to start a business has increased by a quarter, from 40.2 to 49 per cent.
	That is extremely good news, and I do not see why the Opposition should be blind to it. I delight in the fact that in my constituency and in my country, Wales, there is now a spirit of entrepreneurship that did not exist historically. In the past, Wales has seen itself as a country of employees rather than of employers—a country with the branch factory rather than the headquarters.
	Let me give just one example of a company in my constituency that is firmly rooted in Newport and Wales. It is a firm with enormous promise named Lifeforce, which has world patents on a process for parking the immune system—that is, extracting the white cells from blood transfusions and placing them in three different locations, to be stored for a lifetime if necessary. They can then be brought out for use if the person's immune system is under attack or has been damaged by chemotherapy or by a disease such as AIDS. The white cells can then be used to re-infuse the healthy immune system into the body. This is an exciting development. It would have enormous repercussions for our health if we could re-infuse a healthy immune system into the body when it comes under attack.
	The Nobel prize was won by Martin Evans at the university of Cardiff. He is a specialist in mammalian genetics. That, too, has great promise for the future of science and our health. We need to capitalise on those developments. Lifeforce, the firm that I mentioned earlier, already has a link with the Bill Gates Institution and with a firm in America and another in Germany. Its procedure is now a practical proposition that has been approved by the Medicines and Healthcare products Regulatory Agency in this country and by the Food and Drug Administration in America. Those two regulatory bodies have given their approval to its science, which could be of great benefit to our future life expectancy, and it has commercial prospects as well.
	I should like to suggest a way in which the Government could raise money through the Budget. Sadly, the proposal is not in this one, although I have suggested it in the past. They could raise a good £2 billion in a manner that would be painless as well as popular and just. It involves the national insurance scheme, which is very unfair at the moment. People like me, who are in the happy position of having reached retirement age but are still working, pay no national insurance contributions. However, people in this happy situation have reached a time of life at which we could certainly afford to do so, but those of us in that position pay nil per cent. Most hon. Members pay about 1 per cent., because our earnings are high, but people at the bottom end of the pay scale can pay up to 10 per cent. of their income in national insurance contributions. It is a hugely unfair tax.
	If they wished, the Government could change the law so that those who were still enjoying the pleasures of a working life after reaching retirement age would continue to pay national insurance contributions. Indeed, they are receiving some of the benefits of the national insurance scheme that others might not live long enough to enjoy. That would be a just measure, and it would raise the sum of £2 billion. Those fortunate enough to be in that happy position would find such a tax acceptable.
	The national insurance scheme is in a bizarre situation, because it has been building up huge surpluses. The actuaries insist that there should a surplus of about £17 billion, to allow for a serious increase in unemployment. However, we have built up a surplus that is way beyond that amount in each year over recent years, and we now have a surplus of about £48 billion. If we were to continue in that way, by 2013 we would have a surplus in the national insurance scheme that could fund a rescue in another Northern Rock crisis, if there was one.
	The current situation is unfair because the money is being used as though it were ordinary taxation revenue. It is being used in the same way as other taxes are used, but it has been raised unjustly, because it is a tax that falls more heavily on the poor and the low paid than on those who are very well off. I would like those on my Front Bench to consider my proposal and to change the whole nature of the national insurance scheme so that we no longer build up those surpluses.
	A great deal has been made by the Leader of the Opposition of last year's UNICEF report that was critical of the progress that had been made on tackling child poverty in this country. It is a great shame that the same people who exaggerated the effect of that report did not look at UNICEF's report from 2004. It came from the same body from the same source—the Innocenti centre in the Piazza della Santissima Annunziata in Florence—and said that of the 25 richest countries in the world, the country that had achieved most in reducing child poverty was Great Britain. That report was totally ignored by the press. I tried to get some attention drawn to it in an early-day motion, because it had had no coverage whatever, as positive news tends to be something that people do not want to hear. We do not see headlines in the papers about that sort of thing, but it gave impressive recognition of all that the Government had done to take children out of poverty. It is, of course, the negative news that gets the attention.
	The leader of the Conservative party recently wondered how we could allow child poverty to happen and how we could have got ourselves into such a position, but given the extent of child poverty under the 18 years of Tory Government from 1979 to 1997, he should be more careful in his remarks. When the Tories came into office, by the same measure, one in seven children were in poverty; but by the time they left office, it was one in three. That is a terrible record of indifference to the relative poverty of those at the bottom end of the scale.
	We should also look at certain enterprises that the Government have entered into and we should become more critical of the Chancellor's involvement in the nuclear industry. An extraordinary answer was given to my hon. Friend the Member for Blaenau Gwent (Mr. Davies) a fortnight ago. It revealed that an enterprise that had been opposed by hon. Members in speeches and in early-day motions and by environmental groups such as Greenpeace and Friends of the Earth nevertheless had the support of every party in the House. The amount of money spent on that flawed proposal, on an evidence-free and unscientific basis, was £473 million.
	There was no great mystery behind the opposition, because everyone who opposed it said clearly that the cause was impossible: it could not work; it was impractical and it had no rational basis. It was intended that the mixed oxide plant at Sellafield would produce 120 tonnes of uranium fuel every year. It has been in full production for five years now, yet it has produced only 5 tonnes—a monumental failure. It is difficult to go back through our industrial history and find an investment that has failed as spectacularly as that, yet we still put this faith in nuclear power—mainly, I think, because most Ministers and others involved in the enterprise feel themselves to be scientifically semi-literate or illiterate and do not question the claims made by the nuclear power lobby. We already know that the bill for clearing up the mess from nuclear power over the long term is something in the order of £73 billion.
	The affair reveals the extraordinary gullibility of the House. This is not ancient history either; it happened over the past eight years. It was in the year 2000 that the great debates about the mixed oxide plant were taking place in this House. Every one of the arguments put forward by the environmentalists and others in the House turned out to be justified, and the arguments supported by those on the Front Benches of all parties turned out to be false.
	The Lib Dem spokesman mentioned the farming industry earlier, and I would like to make another point about it. There is lobbying at the moment about problems in the farming industry, particularly in pig farming. Almost ignored, however, is the enormous amount of money being made by the grain industry, whose profits went up 70 per cent. one year and nearly 50 per cent. the next year. Those are huge sums. When we talk about additional burdens on the farming industry because of the price of grain, why do we leave out the fact that there have been those huge increases in the incomes of grain farmers on account of that? That is not mentioned—we do not get a morning chorus of whingeing on the "Farming Today" programme about the huge windfall profit enjoyed by grain farmers. If sections of the farming industry are doing exceptionally well, there should be a virement to those sections that are under pressure. We should not continue uncritically to support the whole farming industry as we have in the past. The traditional subsidies are no longer supported, particularly given their effect on the developing world countries. Sadly, one man's subsidy is another man's poverty in another part of the world.
	Opposition Members have mentioned the Office for National Statistics. An official launch will be held by Michael Scholar to celebrate the ONS's new independence. It was suggested that the Act that introduced that independence was of great importance, which it is, given the cynicism about national statistics. Under that Act, the full independence of the ONS will be guaranteed. The office is located in my constituency, and I remember being approached many years ago by statisticians who felt that their work and their integrity were being undermined by a previous Prime Minister, who was moving the ONS from one Department to another, and who had a vested interest in seeing that the figures might be fiddled in some way. I had a letter from Margaret Thatcher at the time, saying what an unworthy thought that would be. But there was that possibility and suspicion throughout that time. I look forward to the fact that when we debate these issues in future, we will know that the statistics provided by the ONS are genuinely independent and objective.

Philip Hammond: This has been an interesting debate, although it has not been particularly well attended by Labour Back Benchers. We started with 11 of them when the Secretary of State stood up, and at the low point of his speech we were down to six. He took what might be regarded as a sensible approach in the circumstances: he adopted the micro-economic approach to analysing the Budget. He focused on the enterprise White Paper, which some in the business community might think of as being akin to fiddling while Rome burns. He spent 20 minutes explaining the details of the well-meaning but rather small-scale proposals in the White Paper, when most of his audience were more concerned about the macro-economic backdrop, which seems to be deteriorating by the hour. Interestingly, he told us that the Government wanted to ensure access to finance for entrepreneurs, but then supported the slapping of an 80 per cent. tax increase on business angels. We know that he fought the cause internally, but ultimately the clunking fist won.
	My hon. Friend the Member for Rutland and Melton (Alan Duncan) countered the Secretary of State's narrow approach by focusing on the macro-economic backdrop to the Budget. He also reminded the House that following the Budget 73 per cent. of people believe that it will contribute to a downturn in the UK economy—perhaps showing us that the man in the street has a better grasp than the man in the Treasury, and also perhaps accounting for the recently published opinion poll showing that Labour's standing on economic competence has fallen from 7 per cent. before the Budget to minus 8 per cent.—in other words, there is an 8 per cent. Conservative lead following the Budget.
	The hon. Member for Taunton (Mr. Browne)—who has returned to the Chamber just in time to hear my next remarks—made an excellent speech. He described the Budget as a Budget with a hole, because the most important measures—the income tax changes—were not in it. He pointed to a lack of purpose or any sense of vision in the Budget, and he contrasted it with the Budgets and speeches of the big beasts who have occupied No. 11 in the past, comparing what they did with this Chancellor's focus on the possibility of introducing a plastic bag tax at some time in the future. He described the Budget as a humiliation for the Chancellor—a series of micro-announcements that he was forced to make to pad out the allotted 50 minutes, with £1 million here and £1 million there. He also gave a highly entertaining, but completely inaccurate, list of supposed Conservative policies, and I am thinking of seeing whether we can book him as an after-dinner cabaret turn for a future Conservative party conference.
	The right hon. Member for Darlington (Mr. Milburn) observed, with what might be described as classic understatement, that mid-term Budgets are never easy. He also described the Chancellor's approach as calm, which is perhaps the friendly-fire version of the description of it as soporific by the hon. Member for Taunton. However, the right hon. Gentleman made a thoughtful speech, in which he focused on the need to support wealth creators—although when he did so, not all Opposition Members were quite sure that he was taking along with him on his journey the right hon. Member for Holborn and St. Pancras (Frank Dobson), who was sitting next to him. The right hon. Member for Darlington also confirmed candidly that the relationship between business and the Government had been sorely tested over the past six months, and he called for a renewed focus on social mobility, which certainly all Conservative Members would agree with. He pleaded with those on his Front Bench to ensure that the Government focus on being an empowering Government, rather than a controlling one. I am sure that the Secretary of State would be happy to accede to that, but I am not so sure whether the Prime Minister will have any truck with it.
	My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) made an excellent speech, agreeing with the right hon. Member for Darlington, but he described the Budget as a mini-Budget that did not move us any nearer to achieving any of the laudable goals that the right hon. Gentleman aspired to. My right hon. and learned Friend also set out a critique of the complacency in the Chancellor's analysis of the strengths of the UK economy. He also contrasted the rapid resolution at Bear Stearns over the past 72 hours with the prolonged agony of dithering indecision that we have been forced to ensure as the Chancellor faced the Northern Rock crisis. He left us with an enduring and charming cameo image of the Chancellor presenting his Budget as the boy stood on the burning deck whistling the tunes of his predecessor.
	Sadly, the Chancellor is not here. He would probably be interested to hear the prediction made by the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) that we face a "winter of discontent" ahead. The Chair of the Public Accounts Committee, my hon. Friend the Member for Gainsborough (Mr. Leigh), reminded the House that efficiency savings are easy to predict but difficult to deliver, and pledged his Committee's continued pursuit of auditable efficiency gains.
	The prescription of the right hon. Member for Holborn and St. Pancras—more regulation—was predictable. He wanted that applied to banks, markets, credit and mortgages. He took us on a trip down memory lane, describing himself as old-fashioned old Labour—and coining an elegant new description of himself as "heritage Labour". Perhaps he thinks he will be preserved for eternity under that label. All in all, it was a nostalgic performance, reminding not a few of us of his speech in last week's Northern Rock debate.
	The right hon. Member for Oldham, West and Royton (Mr. Meacher) made a wonderfully old Labour speech that made the right hon. Member for Holborn and St. Pancras look like a dangerous moderniser. He took us on a tour of Monaco, Liechtenstein and the Canary islands, and he suggested an easy remedy for the Government Front-Bench team. Parroting the TUC line, he told us that the Chancellor could easily collect £40 billion of avoided tax, and lambasted him for not doing so. He helpfully confirmed that, as we have argued, there has never been a time when the Treasury needed big benefits as much as it does now, and he attacked the Chancellor and his predecessor, the Prime Minister, for turning the City into a tax haven, assuring the House that the financial services sector and, as he put it, the so-called knowledge economy, could never replace manufacturing as the mainstay of the British economy.
	The right hon. Gentleman very effectively headed off what I believe he thought was going to be an intervention by me by citing to aid his case Winston Churchill's words as Chancellor of the Exchequer in 1929. I suspect that some of my hon. Friends heard the unmistakable sound of flapping white coats as we reached the end of the speech—but that is for them to say, not me.
	My hon. Friend the Member for North Essex (Mr. Jenkin) had a high-level economic debate with the right hon. Member for Oldham, West and Royton, after which he spoke about the pernicious effect of the doubling of the 10p rate on some of the poorest pensioners in his constituency. He also pointed out that the Government were repeatedly warned of a coming credit crunch threatening an economy that is increasingly built on debt, both public and private. I apologise if time does not permit me to recall the contributions of all other hon. Members.
	I welcome the Chancellor to his place. When the present Prime Minister was Chancellor, he was fond of recounting an old Treasury adage that there are only two types of Chancellor—those who fail and those who get out early enough. He has gone, and the jury is out as to whether he got out early enough. So last Wednesday, it was this Chancellor who had to stand up to admit that at the end of a decade and a half of economic growth, his cupboard was bare, and he had no room for fiscal manoeuvre at a time when our competitors are responding to the economic slow-down by reducing taxes and boosting spending in a classic counter-cyclical response.
	It was the Prime Minister who was responsible for the mismanagement of the economy that left the Chancellor with that empty cupboard. The Prime Minister was responsible for the piling up of public debt through the good years while our neighbours and competitors were fixing the roof while the sun shone, paying down debt and reducing deficits—some of them even set aside something for more difficult times to come.
	Back in 1995, the Prime Minister wrote:
	"Nobody should doubt my iron resolve for stability and fiscal prudence".
	Yet it is thanks to his policies that while Ireland and Australia have paid off all their net public debt, and a third of OECD countries are entering the downturn with a fiscal surplus, Britain has the highest fiscal deficit of any country in the world bar Egypt, Pakistan and Hungary, and the highest peacetime non-North sea tax burden.
	There is therefore no room for manoeuvre. As a result, when the cost of regulation is rising and the corporation tax rate has gone from being the third most competitive in the EU to the 17th, the Chancellor is imposing an 80 per cent. tax increase on business gains. At a time when his own figures show that business investment is set to fall by two thirds, this Chancellor slaps a tax on it. When families are reeling from the effect of two years of falling real average earnings, rising mortgage costs and soaring prices, they are being hit with a total of £2.8 billion of additional tax burden in this year's Budget, on top of the impact of the doubling of the 10p rate bequeathed to the Chancellor from the Prime Minister's last Budget. Taken with all the other income tax changes announced in the Budget, and even after the tax credit changes, that will leave 5.3 million low-income British households worse off and, as the right hon. Member for North Tyneside (Mr. Byers) pointed out in the debate last week, will also drag another 145,000 people into marginal tax and benefit withdrawal rates in excess of 60 per cent.
	Stability, I have to tell the Chancellor, is not only about sound fiscal policy. Stability is also about fostering balanced economic growth. One big problem that we face as we enter this economic slow-down is that our economy is seriously unbalanced, and consequently extremely vulnerable, because of an over-reliance since the beginning of the new century on three key drivers that have delivered between them effectively all of the net economic growth over the past few years. We have had rising public spending financed on the back of mounting fiscal deficits; a soaring housing market that has in turn underpinned a surge in borrowing and fuelled an unsustainable consumer spending boom, on the back of the £1.4 trillion of personal debt that has been piled up; and the dramatic growth of the financial services sector on the back of innovative new financial products.
	The Prime Minister could see—and I suspect has been able to see for some time—that the party would have to come to an end. That is why he was so desperate to move next door at the earliest possible date. He will not have foreseen the scale of the credit crunch, leading to the collapse of mighty financial institutions and bringing the boom in financial services to a shuddering halt. But he will have well understood that the debt-fuelled spending boom of British consumers on the back of spiralling house prices had to come to an end. And he knew, too, that his "blank cheque" approach to public spending could not endure, as the current comprehensive spending review demonstrates, with a halving of the growth rate of public sector spending next year.
	So Britain enters this period of economic slow-down uniquely vulnerable, with all of the principal drivers of economic growth slowing and the public finances in disarray. Last October, the Chancellor revised upwards his projection of how much he would need to borrow in the coming year to £36 billion, and last week he admitted that in the space of just five months, his estimate had risen by another £7 billion. Even that is almost certainly an underestimate. As my right hon. and learned Friend the Member for Rushcliffe reminded us, for seven years the Government have predicted that the public finances would move into surplus two years hence. Every year, that two years is put off by another year, so like the carrot on the stick dangling in front of the donkey, it is always tantalisingly in the future.
	When the Chancellor says that Britain is well prepared for tougher economic conditions ahead because inflation is low, our constituents will wonder what planet he lives on. Does he ever go into a supermarket or fill up a car with petrol? Does someone else write the cheques for his gas and electricity bills? Because in the real world that the rest of us inhabit, inflation is not low and stable; the cost of living is soaring. Bread is up 15 per cent. in a year, eggs 30 per cent., petrol 20 per cent., mortgage interest 12 per cent., butter 36 per cent., and gas and electricity up by double digits in the single month of February—and that is all before the Budget. Of course, the Government are not responsible for the world economic slow-down or the acceleration in global inflation. No one is claiming that they are, although they were quick enough to claim credit when benign world economic conditions delivered steady growth and low inflation powered by the expansion of far-eastern economies over the past decade.
	The Chancellor's predecessor, the Prime Minister, is responsible for the woeful lack of preparedness of the British economy after a decade and a half of economic growth. He inherited a strong economy from my right hon. and learned Friend the Member for Rushcliffe, and his stewardship of it coincided with 10 years of sustained low-inflation world growth. Instead of leaving the economy lean and mean, the Prime Minister bequeathed the Chancellor nothing in the cupboard. There is no legacy from the 15 years of economic growth and nothing put by for the rainy day that threatens. The Prime Minister, as Chancellor, did not fix public services, close the skills gap or the productivity gap, or fix the welfare system.
	If the backdrop to the Budget looked gloomy last Wednesday, it has darkened significantly over the past 72 hours. There are those outside who thought that the Chancellor's downgrade of his economic growth forecast looked optimistic last week. Today they will be thinking that it looks like dangerous complacency.
	I want to put a specific proposal to the Chief Secretary. In normal times, the Treasury, rightly in our view, sticks to the mantra that it makes forecasts of economic growth and fiscal projections only twice a year, in the pre-Budget report and the Budget. Given the scale and speed of the events that are developing around us, and the size of the change in the Chancellor's estimate of the fiscal problem he faces, which he announced last Wednesday, will the Chief Secretary consult the Chancellor and see whether she can assure the House tonight that if the Treasury's internal modelling significantly downgrades his estimate of economic growth, or upgrades his expectation of public sector borrowing, between now and the PBR in November, he will make an interim statement to the House so that Parliament is not kept in the dark on those most crucial issues for the best part of nine months?
	Let me turn to the measures in the Budget that the Chancellor delivered. Most have already been well-debated. I detected a familiar pattern. As in previous years, after the Chancellor sat down the facts caught up with the rhetoric and the Budget unravelled. As many of my hon. Friends pointed out, the new tax on gas-guzzling cars, which was painted as an environmental measure, turns out to be a tax increase on seven out of 10 cars on the road—just another burden on hard-pressed families. It is a stealth tax, not a green tax, and there is a bigger percentage increase in the tax on a Nissan Micra than in the tax on a six-litre Hummer.
	The pre-Budget spin of a fiscal assault on binge drinking turned out not to be a precision weapon aimed at problem drinking but a carpet-bombing of ordinary moderate drinkers. The tax rises that we heard about, it seems, are permanent, yet the increase in the winter fuel payment is for one year only, echoing the one-year pre-election council tax bonus paid to pensioners in 2005. The education spending announcements came with no new money. The rhetorical commitment to extra money for our fighting troops in Iraq and Afghanistan turned out to be a mere accountant's note, transferring money that is already spent from the contingency reserve to the defence budget. The rest was a rehash of the Chancellor's predecessor's Budget announcement and the flotsam that survived the storm provoked by the PBR with a climbdown on non-dom tax, a U-turn on capital gains tax on business and a merciful postponement of the income shifting proposals. The only things that survived intact were the watered-down Conservative policies on inheritance tax and air passenger duty.
	For 10 years, the Prime Minister has traded on a carefully cultivated reputation for having delivered economic stability that was actually the product of a benign world economy. But now that the world economy is slowing and inflationary pressure gathering, his chickens are coming home to roost. The public have spotted his squandering of the legacy that he inherited, and how he has wasted the window of opportunity presented by the decade of Chinese-fuelled, low-inflation world growth. Instead of preparing Britain for the future, as other countries have prepared themselves, instead of turning it into the lean, skilled, competitive and productive economy of his early rhetoric, the Prime Minister blew the lot, and some more.
	Last Wednesday, we witnessed the miserable spectacle of the Prime Minister's successor as Chancellor being left to pick up the pieces as we enter this economic slow-down less prepared and fit, and more vulnerable, than almost any other country in the developed world. That is Labour's economic legacy for Britain. We are left steering into stormy economic waters, with a deficit that makes Italy look positively parsimonious and a Chancellor who has been forced to increase taxes when all his counterparts around the world are lowering theirs.
	This is a bad Budget for Britain. It burdens millions of hard-pressed families and businesses just as the economy is slowing. It is a Budget that has been dictated not by economic logic but by fiscal necessity. The words and figures of the Red Book projections set out for all to see the economic incompetence of this Government and this Prime Minister in failing to prepare Britain for the challenges ahead.

Yvette Cooper: We have had a good debate, with generally thoughtful contributions from Members in all parties. I congratulate the hon. Member for Taunton (Mr. Browne) on his speech, and I agree with the hon. Member for Runnymede and Weybridge (Mr. Hammond)—for possibly the only time—that it was probably the most entertaining one to be made today.
	I listened carefully to the speech made by the hon. Member for Rutland and Melton (Alan Duncan), who had much to complain about. I listened really hard, but I did not hear him put forward a single alternative policy, or even defend his party's tax plans. However, that may be because the hon. Gentleman—like me and, I suspect, like the shadow Chancellor—is struggling to keep up with what those plans are.
	The right hon. and learned Member for Rushcliffe (Mr. Clarke) made some substantive points, and I shall respond to them in due course. In his indomitable style, he lamented what he described as the "puritan" spirit that he said was pervading both public and media. Interestingly, he also called for an end to any pre-Budget consultation and said that measures should be announced and implemented straight away, with none of what I am sure he would call "fashionable" consultation.
	My hon. Friend the Member for Selby (Mr. Grogan) made some important points about alcohol and fuel prices. My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) and my hon. Friend the Member for Blaydon (Mr. Anderson) also raised their concern about the impact of rising world energy prices on fuel bills. They welcomed this year's introduction of the additional winter fuel payments for pensioners, but they also made some important points about the energy companies.
	In respect of the matters raised by my hon. Friend the Member for Selby, I can tell the House that we have made it clear that we expect energy companies to reduce the differential between prepayment meters and standard tariffs and that we will use Government powers if they do not do so. We also expect them to do more on the social tariff. It is worth about £50 million at the moment, but we believe that it should be closer to £150 million. In addition, I can tell my hon. Friend that, if necessary, we will legislate to underpin the tariff.
	My right hon. Friend the Member for Darlington (Mr. Milburn) articulated the importance of global markets, describing both the immense economic opportunities that they offer and the considerable risks that they can pose. He also made clear why it is so important that we work with countries across the world to get greater transparency about the risks involved in global markets so that we can respond to some of the challenges that we face.
	The hon. Member for Gainsborough (Mr. Leigh) questioned the proposed efficiency savings. However, I can tell him that the Government have made £20 million in savings already as a result of a previous comprehensive spending review, and that there have also been tangible net reductions of nearly 80,000 in the civil service work force. That has enabled resources to be redirected to improving services instead.
	My right hon. Friends the Members for Holborn and St. Pancras (Frank Dobson) and for Oldham, West and Royton (Mr. Meacher) raised concerns about the impact of decisions in the City on the real economy. The hon. Members for North Essex (Mr. Jenkin) and for Hertford and Stortford (Mr. Prisk) merely complained about pretty much everything the Government have ever done. As my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform pointed out in response to their concerns, there has already been a significant increase in small and medium-sized enterprises since 1997 and the Budget sets out more help to support them in future.

Yvette Cooper: I will make progress.
	The Budget sets out clear plans to help pensioners and families with children. Even at a time of global challenges, we are able to help the oldest and the youngest. The Budget raises revenue from alcohol duty; that is what makes it possible to help pensioners with their fuel bills this winter, and to help families with child benefit and the child tax credit the year after that. So this is the right time to use that revenue to help pensioners. The average price of a bottle of wine has fallen from the equivalent of nearly £4.50 in 1997 to nearer £4 today. Even after the duty increase, it will still be significantly cheaper than in 1997. So yes, we are giving pensioners an extra payment of £50 for all pensioners and £100 for the over-80s. In 2009 we will use the money to help child tax credit and those on low and middle incomes.
	The question for the Opposition tonight is whether they will back that. Will they back the increase in alcohol duty to fund the payment to pensioners this winter? Will they back the increase in alcohol duty to fund the child benefit increase and the child tax credit the year after? Or will they once again turn their backs on pensioners and on families with children, as they did for so many years when they saw child poverty double and a big increase in the number of pensioners in poverty? Will they once again turn their backs on those who are youngest and those who are oldest across society? It is indicative that the one thing that the Opposition have proposed to cut to fund their plans is Sure Start—one of the programmes that makes the greatest difference to those in greatest need. That is what the Conservatives want to cut.
	What, then, are the alternatives offered in tonight's debate? The hon. Member for Taunton set out what he thought was the Conservatives' policy. He said that the hon. Member for Runnymede and Weybridge (Mr. Hammond) was proposing tax cuts in seven years. He pointed out that we had fought and won a war in less time. The hon. Member for Taunton is doing better than the rest of us if he manages to keep track of the Conservatives' policies. They have said that they think borrowing is too high. They have also called for £10 billion of unfunded tax cuts that would push borrowing even higher.
	This weekend the hon. Member for Runnymede and Weybridge said that the Opposition would not cut taxes for an entire parliamentary term, yet just three days before, on Budget day, they called for massive tax cuts to come in next month. It is still there on the Conservative party's website. The shadow Chancellor calls on the Chancellor to bring in a massive series of unfunded tax cuts, including inheritance tax for millionaires in this year's Budget.

Queen's recommendation  having been  signified —
	  Resolved,
	That, for the purposes of any Act of the present Session relating to finance ("the Act"), it is expedient to authorise the payment out of money provided by Parliament of—
	(a) sums incurred by the Commissioners for Her Majesty's Revenue and Customs in making payments under the Act to charities who are given donations under the gift aid scheme,
	(b) sums incurred by the Commissioners for Her Majesty's Revenue and Customs in preparing for the introduction of a new duty chargeable in respect of flights by aircraft, and
	(c) sums incurred by the Treasury in making payments under the Act from the Exchequer accounts in satisfaction of financial claims concerning any of those accounts.
	Bill ordered to be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, the Prime Minister, Mr. Chancellor of the Exchequer, Secretary Hilary Benn, Mr. Secretary Hutton, Secretary James Purnell, Secretary Ruth Kelly, Secretary Ed Balls, Yvette Cooper, Angela Eagle, Kitty Ussher and Jane Kennedy do prepare and bring it in.